That will be the fourth jump in a public bank forex todays, rendering those who said the cost of money can never rise to econo-weenie status. Meanwhile, speaking of weenies, our guys at the Bank of Canada decided Wednesday not to hike here.
840 and bank boss Stephen Poloz lost another shard of cred. That should guarantee a seriously lower dollar by rutting season. Meanwhile Bank of America says the Fed will hike three more times in 2018. If Poloz is bold, mortgages at 3. Higher rates seem an inevitability, even as Poloz the Dove is wary of cooling off a robust economy too soon. Unemployment is at the lowest level in ten years.
The feds are handing out tens of billions a year that they don’t have, spending up a storm on critical economic issues like compensating gay people and gender equity. So what’s holding them back from pulling the rate trigger this month along with the Fed? The global outlook remains subject to considerable uncertainty, notably about geopolitical developments and trade policies. This means the bank thinks NAFTA is somewhat cooked, and reflects T2’s failure to get anywhere with a Chinese free trade deal last week, plus his questionable move in backing out of TPP. Meanwhile higher rates in the US have the yield curve flattening. If that means nothing to you, good.